How Holiday Pay Works | PTO Calculator Hub

Holiday pay is one of the most misunderstood aspects of compensation in America. Many workers assume they're legally entitled to extra pay for working on Christmas or Thanksgiving, but the reality is more nuanced. Whether you actually receive premium pay depends on your employer's policy, your industry, and sometimes your state.

This guide covers how holiday pay actually works, what rates to expect, and how to calculate your earnings when you're scheduled to work on a holiday.

Holiday pay in the US

Let's start with the fundamental fact that surprises most people: there is no federal law requiring private employers to provide paid holidays or premium pay for holiday work. The Fair Labor Standards Act (FLSA) does not require extra pay for work on Saturdays, Sundays, holidays, or regular days of rest.

However, the vast majority of employers voluntarily provide some form of holiday benefits. According to the Bureau of Labor Statistics, 79% of private-sector workers receive paid holidays as part of their compensation package.

Types of holiday pay

Employers typically offer one or more of these arrangements:

1. Paid Day Off

The most common benefit: you don't work the holiday but receive your regular pay. Salaried employees continue receiving their normal salary. Hourly employees get paid for the hours they would have normally worked (usually 8 hours).

2. Premium Pay for Working

If you're required to work on a holiday, many employers pay a premium rate:

Rate Type	Multiplier	$20/hr × 8 hrs	Extra Earned
Regular (no premium)	1.0×	$160	$0
Time and a half	1.5×	$240	+$80
Double time	2.0×	$320	+$160
Premium + base pay	1.5× + 1.0×	$400	+$240

The "premium + base pay" scenario is the most generous: you get your regular holiday pay (as if you took the day off) PLUS time-and-a-half for the hours actually worked. Use our holiday pay calculator to see your exact earnings.

3. Comp Time

Instead of premium pay, some employers offer a "comp day," a future day off to make up for working the holiday. This is more common for salaried/exempt employees.

How it is calculated

The calculation depends on your pay type:

For Hourly Employees


Holiday Pay = Hourly Rate × Multiplier × Hours Worked


Example: $25/hr × 1.5 × 8 hours = $300

For Salaried Employees


Step 1: Hourly Rate = Annual Salary ÷ 2,080

Step 2: Holiday Pay = Hourly Rate × Multiplier × Hours Worked


Example: $65,000 ÷ 2,080 = $31.25/hr

Holiday pay: $31.25 × 1.5 × 8 = $375

Which holidays qualify

The US observes 11 federal holidays, but only government employees are guaranteed these as paid days off. Private employers choose which holidays to recognize. Here are the most commonly offered:

Holiday	2025 Date	% Employers Offering	Typical Premium
Thanksgiving	Nov 27	97%	1.5× to 2×
Christmas Day	Dec 25	97%	1.5× to 2×
Independence Day	Jul 4	97%	1.5×
New Year's Day	Jan 1	93%	1.5×
Memorial Day	May 26	93%	1.5×
Labor Day	Sep 1	93%	1.5×
MLK Day	Jan 20	44%	1.5×
Presidents' Day	Feb 17	41%	1.5×

Holiday pay and overtime

This is where things get confusing for many workers. Here's how to think about it:

Hours worked on a holiday DO count toward your 40-hour overtime threshold
Holiday pay for time NOT worked (paid day off) typically does NOT count toward overtime
Holiday premium and overtime can stack: If you work 48 hours in a holiday week, you get holiday premium for the holiday AND overtime for 8 extra hours

Example scenario: Week of July 4th

Mon-Wed: 24 hours at regular rate ($20/hr) = $480
Thursday (July 4th): 8 hours at 1.5× ($30/hr) = $240
Friday: 8 hours at regular rate = $160
Saturday (overtime): 6 hours at 1.5× ($30/hr) = $180
Total week: $1,060 (vs. $800 on a normal 40-hr week)

The holiday premium and overtime don't "double up." They're separate calculations. The holiday premium applies because it's a holiday; overtime applies because total worked hours exceed 40.

Industries with holiday shifts

Some sectors regularly schedule employees on holidays and typically offer premium compensation:

Healthcare: Hospitals and clinics operate 24/7. Holiday shifts are often 1.5× to 2× with some offering double-time-and-a-half
Retail: Black Friday and holiday shopping season means most retail workers work at least some holidays. Policies vary widely.
Hospitality: Hotels, restaurants, and entertainment venues. Holiday premium is common but not universal.
Emergency services: Police, fire, EMS. Often receive generous holiday premiums due to union contracts.
Transportation: Airlines, delivery services, public transit. Typically offer premium pay.

Negotiating holiday pay

If your employer doesn't offer holiday premium pay, here are approaches that sometimes work:

Ask for it during hiring: "What's the holiday pay policy?" is a reasonable question in interviews, especially for roles that require holiday availability
Propose comp time: If premium pay isn't in the budget, ask for equivalent time off later
Highlight retention: Employees who feel fairly compensated for holiday work are less likely to call out or quit during peak seasons
Check industry standards: If competitors offer holiday premium and your employer doesn't, that's leverage in negotiations

Holiday Pay FAQ

Am I legally entitled to holiday pay?: In the US, no federal law requires private employers to provide paid holidays or premium pay for working on holidays. The FLSA does not mandate extra pay for weekend or holiday work. However, some state laws, union contracts, and company policies do provide holiday pay or premium rates.
What is the most common holiday pay rate?: Time-and-a-half (1.5× regular rate) is the most common premium offered by employers for working on holidays. Some employers offer double time (2×) for major holidays like Christmas and Thanksgiving. About 86% of full-time workers in the US receive paid holidays.
Do I get holiday pay plus my regular pay?: It depends on the employer's policy. Some companies pay 'holiday premium plus straight time,' meaning you get your regular 8 hours of holiday pay PLUS time-and-a-half for hours actually worked. Others pay only the premium rate with no additional base holiday pay. The first scenario is more generous and sometimes called 'triple time' in practice.
Does holiday pay count toward overtime?: Hours actually worked on a holiday count toward the 40-hour overtime threshold. However, paid holiday time off (where you don't work) typically does not count. So if you work 32 hours in a week and receive 8 hours of holiday pay, you usually don't hit overtime.
What if the holiday falls on my day off?: Most employers either give you a different day off (typically the Friday before or Monday after) or provide an extra day's pay. For Saturday holidays, Friday is usually designated as the observed holiday. For Sunday holidays, Monday is typically observed.